Inquiring minds are watching what is happening in Britain and it isn’t pretty. In “UK: Interest Rates at 8%?” the word nightmare may not be strong enough:

With the recovery faltering, the deficit yawning and the Treasury axe being sharpened, you might have thought that the present economic picture could hardly get worse.

But if one expert’s chilling prediction is right, then far grimmer times may lie ahead for British homeowners.

What might this be:

As if they did not have to shoulder enough burdens already, they could end up facing mortgage repayments three times today’s level, with horrific consequences for our economy.

That is the bleak picture Andrew Lilico, chief economist of the Policy Exchange think-tank, painted yesterday. He believes that next year the British economy will plunge back into recession – and that the future will be even worse than most of us dare imagine.

If Mr Lilico is right, then the economy will soon bounce back from the dreaded double-dip recession.

But once recovery is under way, he thinks, then the Bank of England’s quantitative easing scheme, which pumped £200 billion into the economy in the wake of the credit crunch, will have terrible consequences.

Sound familiar, America? Well, here is their future:

With the money supply out of control, inflation could surge as high as 10 per cent, a level unknown in Britain since the late 1980s.

And to make matters even worse, the Bank of England would then have to raise the base rate to as high as 8 per cent, leaving hard-pressed homeowners facing mortgage rates at an eye-watering 12 per cent.

With house prices and debt at record levels, this would be a catastrophe.